McDonald's January Global Comps Drop

McDonald's (NYSE: MCD) has released its global comparable sales figures for January. All told, these dropped 1.9%. A decline was expected, as the company last month sounded a warning to that effect. However, analysts had anticipated a narrower drop of around 1.1%.

The only one of the company's three main geographical regions to record a January increase was the U.S., which advanced 0.9%. Europe fell 2.1%, while Asia/Pacific, Middle East, and Africa recorded a 9.5% drop. The company attributed the latter to "ongoing weakness in Japan and negative results in China due primarily to the shift in timing of Chinese New Year and, to a lesser extent, the residual effects of consumer sensitivity around the recent supply chain issue in the chicken industry, which more than offset positive results in Australia."

McDonald's is slated to release February 2013 sales figures on March 8.

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Based on the market's recent response to various other misses by top companies I would be inclined to look for a delayed down reaction for MCD. Both MCD and YUM will experience significant competition in their foreign markets. Both require strong support from these markets. The recent tax increase (FICA) will have a material impact on the low cost providers. India just reported their expectations for a slower 2013. YUM was looking to make India the next China....perhaps they should just try to buy chicken free of drugs. I would caution anyone from getting too enamored with either of these stocks.